India offers a hug potential for the power tool industry owing to the abundance of labour, availability of raw materials and entrepreneurial skills. Unorganised till recently with the presence of small and medium players who import cheaper tools and distribute in the market, strong presence of some of the major players like Bosch, Hilti and FEIN Power Tools have provided the much needed facelift to this industry. Power tool industry can be classified according to the users in to two major classes: Do-It-Yourself (DIY) and professional users. The DIY segment is mostly home needs and price driven market where an artisan or user only focus on getting the job done. This segment is mostly controlled by unorganised players who mostly import cheap tools or make it locally.

Current Trends
Estimates suggest that the domestic power tool industry is growing at an annual rate of 5-7 per cent and there is immense potential for players in this sector to reap the benefits. Although the US is the largest market for power tools, China and India remain the fastest growing markets. There has been an average growth of 40 per cent per annum in India for the last seven years.

Ameer A Munaff, Managing Director, FEIN Power Tools India, says, ?International brands have a major market share in the professional power tools segment. The current market size of the power tool industry as a whole is projected at Rs 2,500 crore with 55 per cent share happening from organised sector. A recent study shows that the demand for power tools will rise 4.8 per cent year-over-year globally through 2018 to $32.9 billion.?

According to Panish PK, Regional Sales Director, Bosch Power Tools, ?The professional power tool industry is estimated at Rs 1,500 crore and is growing at 7-8 per cent, in that Bosch commands more than one-third market share. Over the last five years, our CAGR is 20 per cent and has been a continuously profitable business unit. We are now targeting a market share of 40 per cent in power tools by 2020.?

Shyam Raghunandan, Director - Marketing, Channel & Field Engineering Sales, Hilti India, says, ?We see roughly Rs 3,000-4,000-crore market per annum. We see it growing by 7-9 per cent on an annual basis for the next few years.?

Demand-supply scenario
With growth in demand from metalworking, manufacturing, capital goods and other such industries, power tools segment sees a steady growth in the coming years. According to Munaff, with 7-7.5 per cent GDP growth and market returning to normalcy, the growth is not only back but bound to go up more. There is enough consumption and demand that gives business potential for existing as well as space for more new entrants and most important the huge untapped and niche markets which are available. India is an ideal destination and the entry of global players is a big boon and a big step forward for the Indian Industries. He points out, ?The high demand for power tools is visible even on the e-retail segment especially after the sudden surge of online shopping websites. We are bullish about the business potential and which is unstoppable in India in near future. We at FEIN India are concentrating only on high-end niche market in the professional tools segment.?

Application areas
Power tools have a lengthy association with construction, woodworking, metalworking, engineering, fabrication, service and related verticals. Owing to a boom in these, the demand is tremendous. In the construction and metalworking segment there has been a radical shift from using hand tools to power tools. Panish says, ?Our customer base profile is diverse and includes professionals from the construction and fabrication industries as well as those from the railways, car manufacturers, artisans, plumbers and homemakers.?

Munaff explains, ?Construction segment can be classified into concrete, lumber and metal applications. FEIN mostly focuses on the latter two which come under interior construction as Indian construction mostly uses concrete unlike the west where lumber is the basic raw material. FEIN?s automatic metal core drilling machines are most sought after for the huge infrastructure or construction projects like bridges and towers where steel is involved and serial drilling is required. FEIN is also set to launch various cordless tools that can be employed in the construction industry where power supply is inadequate for power operated tools.?

Bosch sees construction as a major growth driver for power tools. Panish says, ?The power tools sector has witnessed significant changes over the years. Owing to a boom in the construction and related industries, these have been major growth drivers. Additionally, technological developments, innovation and years of study have led to the shift from corded to cordless tools, the use of energy-efficient technology, specialised stores or even advanced safety features which most modern tools are equipped with.?

According to Munaff, real estate is the second largest employer and contributor to economic activity, after agriculture sector. A recent report says that 50 per cent of the demand for construction activity in India comes from the infrastructure sector while the rest comes from industrial activities, residential and commercial development etc. As per industry estimates, the Indian real estate market is expected to grow to approximately $140 billion by 2017. ?The demand for professional power tools is directly proportioned with the growth of infrastructure development. Almost 50 per cent of the power tools from FEIN?s range can be used for various applications in the construction segment and with boom in real estate industry by government?s various initiatives, the power tool sector is set to grow,? Munaff points out.

Raghunandan is also optimistic about the growth of the segment, ?There will be a huge demand of power tools due to investments being made by government in power and infrastructure sector. With the Prime Minister?s Make-in-India initiative, more manufacturing facilities will be built where our products are extremely relevant. This will create huge demand of infrastructure, roads, projects and Smart Cities, world class commercial and residential construction, where our products will be extremely relevant.?

Innovation & technologies
According to Panish, power tools are preferred over traditional tools as they are designed to save energy, are time-efficient and are capable of high performance. He adds, ?The range of tools offered by Bosch are compact, light-weight and run on environment-friendly lithium-ion technology. They are a diverse range of product offerings which serve as solutions to both industrial and engineering applications that include screw driving, drilling, cutting, grinding, polishing, sanding etc.?

FEIN also offers lithium-ion battery operated power tools. Munaff elaborates, ?The Li-ion battery operated tools delivers the same performance level as the corded version thereby outpacing the larger corded power tools wherever possible.? According to him, another innovation that has taken FEIN to the top in the grinding segment is high-frequency or colloquially known as HF grinders. These HF grinders can be used continuously even under extreme loads without fearing a break-down. FEIN has recently launched angle grinders with ?Ergo-Grips? that are more convenient to hold and handle than the traditional grinders.

Raghunandan says, ?We drive innovation in products to increase user productivity and safety. We continuously bring in innovation such as premium service which allows customers free repair service for one year, anti-vibration reduction, active-torque-control which protects the wrist, dust-free drilling and innovative wave-chisel for breaking productivity etc.?

Safety
The most important aspect of any power tool is its safety. Improper handling can lead to damage, injury, and accidents. It is critical for power tools to have features which ensure the safety of users. Says Panish, ?Bosch has played a significant role in providing training on safety and correct usage of power tools and has over the years, established a reputation for our quality, innovation, safety and initiation. All Bosch tools are accompanied by safety features and detailed manuals to ensure users are carefully instructed about proper usage so safety is not compromised and health hazards and other disasters may be avoided.?

Munaff elaborates, ?FEIN constantly focuses on increasing the safety level in all our ranges. Today, most of the FEIN machines come with H07 industrial chords for added safety to withstand the toughest conditions in the industries. FEIN recently launched oscillation tools with 70 per cent less vibration and noise reduction up to 50 per cent, making it one of the best and safest oscillating power tool in the industry.? Educating the user about the safety parameters is most important as all power tools can be dangerous if both general and tool specific safety instructions are not followed carefully.

Says Raghunandan, ?There are three factors that can cause damage while using power tools. Dust control can cause long-term respiratory damage. We have dust removable system that pulls the dust. Excessive exposure to vibration leads to hand-arm-vibration syndrome. We have Active Vibration Reduction (AVR) technology which reduces vibration more than 50 per cent as compared to conventional power tools. Electrical safety is the third factor and our products comply with international standards.?

Product range
Power tools in the construction segment are divided in to three groups by the raw materials used: concrete, lumber and steel. Says Munaff, ?FEIN has specialised hand-guided and magnetic base core drilling machines which are more productive and cost-effective than twist drills. Stainless steel rails are now a part of all major residential or commercial buildings and the final finished look of the stainless steel compliments the beauty of the structure. FEIN has got a wide range of machines specially designed for the stainless steel processing, be it polishing or grinding.? Hilti will be showcasing its products and innovations at the forthcoming Excon 2015. Raghunandan says, ?We participate on a single theme of ?Innovation, Safety, and Productivity?. We have already launched a couple of products and will display them such as TE 1000-AVR breaker, TE 800-AVR breaker and some innovative scanning solutions.?

Challenges
Since a significant amount is invested in R&D, prices tend to be high and reflective of superior quality. According to Panish, there is often a misconception that power tools are unaffordable and this myth needs to be dispelled. He adds, ?There is also a challenge in educating the user to move from using hand tools to power tools especially in India, given that these are usually durable, high-performing, automated, precise and time-efficient, investments will bear fruit.?

According to Munaff, the major challenge of the power tool industry is within the industry itself. He feels, ?Imports and import content is one of the biggest challenges for the power tool industry as it largely depends on the fluctuating forex. The forex has become a deciding factor for the pricing of the tools and the high prevailing customs duty adds up to it.?

The lack of awareness among the users about the right use of the tools for the right application is another area of concern. Munaff adds, ?To tackle this, FEIN has the concept of ?Demo at Door-step? where a FEIN expert will visit the customer?s location to study their application and suggest the right tools.?

Opportunities
Major players in power tools sector are bullish about the emerging opportunities in the market. Says Panish, ?Power tools are fast outpacing hand tools and both professional and home users are looking at getting work done more efficiently and effectively. Also, there is a high demand from professionals owing to the growth of the construction industry. There is also a continuous pressure from the market and the users to launch innovative tools hence a lot of time is being spent on research and product development to enhance tool strength and durability offerings. Overall the resurgence of the construction and infrastructure industry is a boon to the Power tool market since it will boost the demand for power tools. We are constantly innovating and launching new products to keep up with the demand and aggressively focusing on user experience and market readiness.?

According to Munaff, the machine and tool industry is the backbone of India?s engineering sector. He adds, ?There is enough consumption and demand that gives business potential for existing as well as space for more new entrants and most importantly the huge untapped and niche markets which are available. In this competitive market of speed, precision and machines that bring a huge difference by way of giving cost effective and efficient solutions for the toughest industrial applications for day to day work has unlimited opportunities available.?

Future outlook
Considering the new positive energy in the Indian infrastructure and manufacturing sectors, and a slew of initiatives like Make-in-India, the power tool majors are quite optimistic and are stepping up to have a consolidated presence in this market. According to Munaff, India is a very significant, important and interesting market for FEIN group. ?FEIN?s professional tools will bring a huge difference in the Indian market by way of giving cost effective and efficient solutions for the toughest industrial applications for day to day work. FEIN is responding to the growing significance of the Indian market by forming its own subsidiary here. This set up is very important to strengthen its position globally and FEIN India will also be a hub for all SAARC countries for these tools which will be exported from here in future.? According to him, in 2015 FEIN launched GHB 150 series, a hand-held belt grinding machine that is three times more powerful than an angle grinder and can also be used as a mini-stationary belt grinder station. There are a lot of products in the pipe line that will be launched by the year end including the new variants of cordless oscillating tools and compact cordless drills.

Says Panish, ?In this fiscal, we are looking at launching more products for the home, hobby and garden segments. We also have plans to roll out a range of competitively priced products targeted at the Indian tradesman, as part of our efforts to widen the customer base. To suit their specific requirements, Bosch has also made a concerted effort to develop compelling entry-level products.? He concludes, ?With India?s demographic skewing, with younger and more of the population online, the e-commerce sector in the country continues to witness tremendous growth. Our Power Tools division started using this channel to reach new customers two years ago and by the year 2020, we aim to increase our market share considerably.?

With the technologically innovative products being introduced in the market by leading players, better awareness among the users on the importance of productivity, efficiency and safety of tools, and the expected growth in the user/application segments due to government initiatives, the power tools sector is going to achieve new power of growth in the near future.